Am I missing any expenses in my analysis?

Question

I'm working with an all-cash buyer and helping him do an analysis for a flip, but I want to make sure we aren't missing any expenses (or have them in the wrong category).

Fixed Costs:

1. Purchase Price

2. Taxes

3. Insurance

4. Attorney Fees

5. Closing Costs

6. Commission

7. Inspection

Variable Costs:

1. Rehab Cost

2. Utilities

3. NJ Realty Transfer Fee

Anthony Dadlani · Answer

We buy all our fix and flip properties with cash as well. However in our analysis spreadsheet we always factor in the cost of capital.  Even if funds are not borrowed capital has a market cost.

Best of luck in all your endeavors

Chris Laino · Answer

@Anthony Dadlani buyer is not using borrowed money, so how do you calculate it into your analysis?

Anthony Dadlani · Answer

Cost of capital if you are borrowing money. Even if you are not you should calculate the cost of money into your analysis.

Best of luck in all your endeavors

Franklyn Williams · Answer

Hey @Chris, another way to think about it is in terms of acquisition costs (most of your fixed costs, which are just buyers negotiable closing costs), holding or carrying costs (recurring payments of taxes, insurance, utilities, routine maintenance, etc.), renovation costs, and disposition costs (seller's closing amounts for transfer taxes and fees, realty commissions, atty fees, title fees, etc).

Greg Dickerson · Answer

@Chris Laino don't forget any maintenance of the property during construction and while it's on the market. Yard in cutting season, snow in winter, etc.